Reassessment notice to a non-existent firm is void; participation cannot cure the defect or save the assessment.

A notice issued under Section 148 to a partnership firm that had already ceased to exist after conversion into a company was void, because the successor company became the assessable entity on conversion. Proceedings initiated against a non-existent person could not be sustained, and the defect was not cured by the assessee's participation. Section 292B did not apply because the notice itself was issued to a dead entity, so the reassessment and the assessment made pursuant to it were liable to be quashed. Revenue could proceed only, if permissible in law, against the successor company.

---

---

Issues: Whether notice issued under Section 148 of the Income-tax Act, 1961 and the assessment made in pursuance thereof were valid when addressed to a partnership firm that had ceased to exist after conversion into a company under Chapter IX of the Companies Act, 1956.

Analysis: The firm had been converted into a company with effect from 2 March 2006, and the notice under Section 148 was issued later in the name of the erstwhile firm. Once the conversion took effect, the partnership firm ceased to exist in law and the successor company became the assessable entity. A notice issued to a non-existent person cannot sustain proceedings, and participation in the proceedings does not cure that defect. The defect is not a mere procedural irregularity within the scope of Section 292B where the notice itself is issued to a dead or non-existent entity.

Conclusion: The notice under Section 148 and the assessment made pursuant to it were void and liable to be quashed, in favour of the assessee.

Final Conclusion: The assessment proceedings failed at the threshold because they were initiated against an entity that had ceased to exist, leaving the Revenue free to proceed, if permissible in law, only against the successor company.

Ratio Decidendi: A notice or assessment issued in the name of a non-existent entity is void, and such a defect is not cured by participation or by Section 292B of the Income-tax Act, 1961.

---